Jury Awards $17 Million Against AT&T

A federal jury in Kansas City, Kansas, has ordered AT&T Inc. to pay almost $17 million for overcharging customers in California when passing along a federally-mandated phone fee. But, the jurors determined there wasn’t enough evidence showing the telecommunications giant conspired with Sprint Nextel Corp. or then-competitor MCI to overcharge customers nationwide for the Universal Service Fund.

The antitrust case consolidated dozens of class action lawsuits filed across the country and covered customers who paid into the Universal Service Fund between August 1, 2001, and March 31, 2003. The fund subsidizes the cost of running phone service to rural areas, low-income customers and public facilities, such as schools, libraries and rural hospitals. Carriers are required to contribute to the fund a percentage of their gross revenue from interstate and international calls. The Federal Communications Commission sets the contribution rate. AT&T described the fee on its bills as a “Universal Connectivity Charge.”

After a five-week trial, jurors agreed AT&T had violated its contract with its California residential customers, a subset of the class action members, and awarded $16.9 million. Sprint had been a co-defendant in the case. But the Overland Park, Kansas-based company agreed in September to settle its involvement for $30 million.